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Legislative Assembly for the ACT: 1996 Week 11 Hansard (26 September) . . Page.. 3457 ..

MR WHITECROSS (continuing):

Dr Chessell also said:

The headline budget is in surplus in the ACT by $10m, but the underlying budget is in deficit to the tune of $98m.

Chief Minister, why do you still persist in trying to hoodwink the public into believing that you brought down a budget which was in surplus by $10m when this is demonstrably not the case?

MRS CARNELL: Thank you very much, Mr Whitecross. Mr Whitecross, there are two ways you can look at this budget, no doubt. One of them is a $10m cash surplus in this budget, which without any doubt exists. There are no new borrowings in this budget. We are paying off $15m worth of debt. You can also look at the whole situation from the point of view of accrual accounting, which is the way that we have moved to and will move to in the future. There is a $128m operating loss in this budget.

Mr Whitecross: Where does the $128m come from?

MRS CARNELL: This is the first time that that level of transparency has existed in any budget for any government in this country. The $10m surplus is a move from a $30m loss last year. That is a $40m improvement in cash terms. In accrual terms, we moved from a $280m operating loss last year to a $228m operating loss this year.

Mr Whitecross: It is $228m now?

MRS CARNELL: That is an improvement of $48m. On one side you have a $40m improvement in cash terms or on the other a $48m improvement in accrual terms.

I think it is really important to know what else Dr Chessell said on radio yesterday morning. Dr Chessell went on to say what the ACT should have done, something that Mr Whitecross is just not willing to tell everybody. We are all waiting with bated breath to find out what those opposite would have done, given the same opportunity. Dr Chessell went on to say that he thought we should have gone down the path that Victoria did. He said that what was really needed was the same sort of approach as was taken in Victoria. What did Victoria do? Apart from selling assets, significant amounts of assets, to remove a quite significant debt from Victoria, they also went down the path of, I think, 50,000 Public Service redundancies and significant reductions in government expenditure as a result of that.

It is quite right that Dr Chessell and Access Economics believe that we should have taken the economic rationalist approach to this budget. They believe strongly that we should have gone down the path of expenditure reduction. Expenditure reduction in the public sector, by its very nature, means massive redundancies. I have already said in this place that I believe that massive redundancies in the ACT right now would be an absolute disaster for this economy. If we had not gone into a stimulatory approach, into a countercyclical budget cycle, I believe that this economy would have hit a brick wall.

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